Welsh Rugby Union seek to renegotiate loan
- Published
Steve Phillips was the Welsh Rugby Union's group finance director before succeeding Martyn Phillips as chief executive
Chief executive Steve Phillips says the Welsh Rugby Union (WRU) are looking to renegotiate more favourable terms on their coronavirus support loan.
The WRU took out the loan in 2020 under the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
The loan was to enable Wales' four professional teams to avoid financial collapse during the pandemic.
Phillips says better terms will allow the regions to "not only consolidate but remain competitive".
Welsh rugby has received a £13.5m grant from the Welsh government as part of its £17.7m funding package to help spectator sports in Wales impacted by the Covid-19 pandemic.
Phillips had outlined in December 2020 that a package of £30-£40m was required to help Welsh rugby survive.
In November 2020, the four regions agreed how the original £20m loan would be shared between them with Scarlets receiving £5.5m, Cardiff Blues and Ospreys £5m each, and Dragons £4.5m.
The loan was negotiated by the WRU on behalf of the regions who are responsible for the repayments over a three-year period.
Now the WRU are hoping the Welsh government will help with Phillips saying they can renegotiate the loan or replace it with further government assistance.
"It's an either or really because both will serve the same thing. You can achieve the objective either way," said Phillips.
"So a final piece in the jigsaw for our professional game will now be to re-address the terms contained within the CLBILS loan.
"More favourable terms will allow our regions the opportunity to not only consolidate but remain competitive when the current pandemic leaves us and create the necessary resources to ensure (we meet) our stated aim - that Welsh rugby at all levels, survives intact, is competitive and sustainable.
"We are grateful for the Welsh government support provided to the community and professional game in Wales to date.
"From the outset, which began last May, during negotiations for a funding package which would bring our game through this coronavirus pandemic intact, discussions have been positive, rigorous and detailed.
"In consultation with Welsh Government, we acted quickly and found a solution - with a £20m CLBILS loan from NatWest providing the Cardiff Blues, Dragons, Ospreys and Scarlets security in the immediate term.
"This was at a time when government had other priorities, a direct focus on containment and saving lives around the country.
"Subsequent to that, the £13.5m grant for the professional game has been both welcome and timely.
"We know we will need more help and continue constructive conversations about addressing the challenges, with our current loans in particular.
"We will continue to work together with Welsh Government to achieve our stated aim of ensuring Welsh rugby survives the pandemic intact. We can see the way ahead.
"Together with our professional clubs, we are revisiting our current professional rugby strategy with a view to ensuring we are best placed when we emerge from the pandemic."
Phillips says the £20m loan and £13.5m grant adds up to the total he was looking for the professional game in Wales.
England, Ireland and Scotland's rugby authorities had all been offered financial packages by their governments.
The UK government's package saw £135m pledged to rugby union in England as part of the £300m winter survival package.
Provisionally the Rugby Football Union (RFU) - which governs the sport in England - is set to receive £44m, Premiership Rugby clubs are expected to get £59m, Championship clubs £9m and community clubs £23m.
Rugby union in Scotland will receive £20m. Of that £5m is in loans and £15m in grants.
"We've ended up with £33.5m on a combination of grants and loans probably in line with expectations so I think the journey so far has been a successful one," said Phillips.
"You can then compare to Scotland who I understand are getting a £15m grant and a £5m loan, we're a lot more than that, although you can get into a debate about the mix of grants and loans.
"There's no real certainty yet about what England are getting in terms of the mix, so I'm pleased where we've ended up. It's not really a like for like comparable with other unions though."
Phillips also insisted the financial difficulties are not over with the grant designed to help the sport survive until September.
"You do start the question already of what the autumn will look like and we will start getting challenges," said Phillips.
"We've already had this conversation with government, everything is back on the table again then, so it's far from over."
Phillips also said negotiations remain ongoing with CVC Capital Partners, who are looking to invest in the Six Nations.
The WRU are in line to be given at least £50m from a deal which would see the private equity company acquire a 14.5% stake in the tournament.
The French Rugby Federation (FFR) has released a statement saying it has reached agreement with the investors, but Phillips said of the WRU's position: "We continue to discuss with CVC the opportunity of them becoming our partners in the Six Nations and we are confident of a positive conclusion to this activity soon."